Beer prices set to rise by 30p ahead of duty increases in Budget as UK hit by supply shortages

Higher wages, combined with energy and supply shortages, is leading to rising costs across the hospitality industry

The cost of a pint of beer could rise by 30p before any duty increases announced in the Budget, reports say.

The anticipated price hike comes amid as more than 80 per cent of British pubs are said to have raised, or are planning to raise, their costs.

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At a glance: 5 key points

  • Rising costs to the price of a pint is reportedly a result of higher wages, coupled with energy and supply shortages.
  • Publicans are now appealing to Chancellor Rishi Sunak to freeze the alcohol duty rate amid fears a £6 pint could become commonplace in London and the south east.
  • The Times reports that drinks wholesalers Matthew Clark and Bibendum are hiking prices up by between 3.5 and 5 per cent next month.
  • It follows warnings that a shortage of hospitality staff returning after furlough has led pubs to increase wages to fill the estimated 134,000 vacancies across the sector.
  • Hospitality businesses across the UK, including pubs, restaurants and hotels, have been suffering with supply chain issues and a shortage of food and drink items.

What’s been said?

A spokesman for the companies, which are owned by the C&C Group, told The Times: “As our industry recovers from the pandemic, the pressure on UK and global supply chains has added increased cost and complexity.”

Dave Mountford, co-founder of the Forum of British Pubs, predicted that publicans would have to increase pint prices from 20p to 30p to meet rising costs.

He said: “In my pub that means I will be charging more than £4 for a pint of cask ale for the first time.

“It will mean much more in areas like London. ”

What is causing supply chain issues?

Several factors have contributed to the disruption of the UK supply chain, including worker shortages and new immigrations rules affecting HGV drivers.

There is estimated to be a shortfall of around 100,000 lorry drivers in the UK, causing delays to deliveries which has consequently led to shortages of some products.

Soaring energy costs have also added to the cost of food production and logistics, while the pandemic is still causing delays to the international supply chain, meaning grocery and toy imports have been affected.

Reduced flight schedules has also resulted in a decreased capacity for air cargo, adding more pressure on international ports, while Covid-19 restrictions in east Asia have forced some key ports to close in the region, holding up items such as clothes and furniture.

Retailers have admitted that the combination of rising energy bills, delays in shipping and higher wages aimed at addressing staff shortages have all resulted in overall higher costs for business.

The British Retail Consortium (BRC) has said that three-fifths of retailers are now planning to increase prices by the end of the year as a result, while around 10% of retail bosses said they have already hiked prices to offset the soaring costs.

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